INVESTMENT OF PUBLIC FUNDS	No. 5-14	Rev. 5-11-95
		Date 9-9-81

I. PURPOSE

To establish University guidelines and procedures related to the reporting and investment of public funds.

II. REFERENCES

State Money Management Act, Section 51, Chapter 7, Utah Code Annotated, 1953 as amended

Rules of the State Money Management Council

Utah State Board of Regents Investment Policy (R541)

Weber State University PPM 5-4c, Banking Services

Weber State University PPM 5-25h, Procurement from Vendor in Which University Employee Has an Interest

III. DEFINITIONS

A. Public Funds

State money and all other funds, regardless of the source, which are owned, held or administered by the University.

1. State Funds

Funds from legislative appropriations for the support and operation of the University.

2. Donated Funds

Funds acquired by gift, devise or bequest. Also referred to as development and/or endowment funds.

3. Other Funds

Funds not identified under 1 and 2 above, primarily consisting of plant funds, student funds, auxiliaries and agency funds.

B. Public Treasurer

A Weber State University employee who has been designated by the Board of Trustees as the University's public treasurer, as defined in the State Money Management Act, and who has been delegated the responsibility for the safekeeping and investment of the University's public funds.

IV. GENERAL PROVISIONS

A. The investment of public funds by the University shall comply with applicable statutory provisions, including the State Money Management Act, the rules of the State Money Management Council, the policies of the State Board of Regents and the policies of the Weber State University Board of Trustees.

B. The Board of Regents has delegated authority for management of investments of funds in the custody and control of the University to the Board of Trustees which in turn has delegated such authority to designated officers or employees of the University. The signatory powers may be delegated by corporate resolution or other appropriate written instrument.

C. The vice president for Administrative Services shall recommend for appointment by the Board of Trustees an employee of the University to serve as the University's public treasurer. The nominee shall possess demonstrated skills and capabilities in the management of institutional cash and investments. An interim public treasurer may be appointed by the vice president for Administrative Services to serve in the absence of the public treasurer. Such an interim appointment is effective until the return of the public treasurer or the next regular meeting of the Board of Trustees, whichever occurs first.

D. Investment Objectives

The University shall manage its funds according to the following objectives:

1. Conformity with state law, pertinent bond covenants, donor instructions or other pertinent legal restrictions

2. Protection and safety of principal

3. Liquidity or availability of funds

4. Recognition of the different investment objectives between operating and permanent funds. Operating funds shall be invested so that the maturity of the investment does not exceed the anticipated date of the need for expenditure of the funds.

5. Maturity of investments, so that the maturity date of the investment does not exceed the anticipated date of the expenditures of funds.

6. Maximization of the rate of return consistent with the foregoing objectives.

Selection of investments shall be made with the exercise of judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence would ordinarily exercise in the management of their own affairs, not for speculation but for investment, considering the safety of their capital as well as the expected benefits to be derived and the duration for which such investment is to be made.

E. Beneficial Interests and Donor Restricted Investments

In addition to public funds owned, held or administered by the University, the University may be the beneficiary of trust funds, which it does not own nor control, and which are administered by independent trustees or boards. This policy does not apply to such trusts nor to donated funds which the donor has directed to be invested in specific securities or properties.

V. POLICY

A. Authority to Manage Public Funds

1. The authority to manage the University's public funds which authority has not otherwise been delegated is delegated to the University's public treasurer.

2. Qualified investment counsel may be appointed by the Investment Committee and approved by the Board of Trustees to provide investment advice to the public treasurer and/or retained to manage one or more investment pools. Investment counsel and managers will be chosen on the basis of investment performance and investment reputation in the financial community as well as cost of services. Such appointments will be subject to annual review. Investment counsel and managers will be compensated for services as authorized by the Board of Trustees.

B. Approval of Investment Decisions

1. The public treasurer is authorized to purchase and sell repurchase agreements or money market funds and other investments in compliance with applicable law, rule, policy or regulation.

2. The public treasurer must receive the approval of the vice president for Administrative Services or the University president for any individual investment transaction exceeding $1,000,000, excluding repurchase agreements and transactions with the State treasurer's investment pool.

3. No person may engage in an investment transaction of public funds of the University except as provided under the terms of this policy.

C. Investment Pools

1. Ordinarily, investment funds will be pooled to accomplish the objectives stated in IV, D above.

2. The investment pools of the University will consist of the following:

a. Cash Management Pool

Source of Funds

All funds of the University not assigned to the endowment pool, including but not limited to student activity accounts, internally restricted accounts, auxiliary accounts, agency accounts, service enterprise accounts, and general fund accounts.

Investment Strategy

At least 30 percent of pool's cost basis must be invested in securities with maturities not to exceed 1 year.

Ordinarily no individual investment in this pool will have a maturity exceeding 5 years.

The investments will be made in accordance with Section 51-7-11 of the State Money Management Act and any other applicable law, rule, policy or regulation.

b. Endowment Pool

Source of Funds

Endowment funds including quasi endowments (funds functioning as endowments) specifically assigned to the endowment pool by the University administration.

Investment Strategy

Invested to maximize total return (cash yield and capital appreciation).

Cash Yield must be sufficient to meet the projected cash needs of the endowed programs.

Ordinarily a portion of the total annual return sufficient to maintain the purchasing power of the endowment shall be transferred to the endowment principal. Such portion to be determined annually by the University Investment Committee.

Investments shall be made in accordance with donor directive and Rule 2 of the Money Management Council and any other applicable law, rule, policy, or regulation.

3. Additional investment pools designed to accomplish alternative investment objectives may be created when deemed appropriate and approved by the Board of Trustees.

D. Separate Investments

Certain funds may be separately invested, rather than included in a pool, if one or more of the following conditions exist:

1. The investment of the funds has been specified or restricted by the donor in a manner which makes it impractical to co-mingle with funds in investment pools.

2. The funds have been pledged or dedicated and must be invested in accordance with the objectives and guidelines stated in bond resolutions or other debt agreements.

3. Funds of the University Foundation which are assigned by the Foundation Board of Directors to be invested by the University.

E. Distribution of Income from Investment Pools and Account Eligibility

The net realized earnings after reinvestment of principal in accordance with Section V.C.2.b. of this policy from the various kinds of investments in each pool will be distributed quarterly to each eligible account in proportion to its share of the applicable investment pool. The quarterly distributions will be based on estimated net earnings for the period. The final distribution each year will be adjusted to reflect actual net earnings. To be eligible, an account must maintain a minimum balance to be determined annually by the Investment Committee. Eligible accounts include development and endowment accounts, i.e., donated funds and any other account so designated by the President's Council. All other investment income will be distributed to the discretionary fund account.

F. Donated Securities

1. All donated securities will be processed through the Development Office. The value of donated securities shall be established for donor purposes in accordance with appropriate IRS regulations and receipted accordingly.

2. Ordinarily, securities which are received by gift or bequest shall promptly (or as soon as prudent based on current economic conditions) be sold in accordance with V, B, 2 above and procedures established by the University Development Office. Exceptions are securities which would otherwise be held by the University in accordance with investment objectives stated in IV, C above and which meet the requirements of the State Money Management Council and securities with restrictions specified by the donor of the gift

or bequest which preclude the University from selling the securities. All securities held by the University will be registered in the name of Weber State University.

G. Internal Controls

The University shall establish a system of internal controls which shall be evaluated annually by the University's internal auditors and/or by independent auditors. The controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties or imprudent actions by University employees and officers. Such controls shall provide for, but not be limited to, the following:

1. Separation of transaction authority from accounting and record keeping

2. Appropriate segregation of other related duties

3. Custodial safekeeping of securities

4. Avoidance of bearer-form securities

5. Clear delegation of investment authority

6. Written confirmation of telephone transactions

7. Supervisory control and oversight

8. Documentation of transactions and strategies

H. Reporting Requirements

1. The public treasurer shall submit monthly investment reports to the secretary of the University's Board of Trustees in a timely manner. Such reports will include the monthly portfolio activity as well as the detail of the University's entire portfolio, showing costs and market for each investment and maturity dates where applicable. The secretary shall place the report on the agenda of the next regular Board meeting. The Board, at its regularly scheduled meeting, shall approve or reject the reports.

2. The University shall submit to the office of the Utah System of Higher Education (USHE) a copy of the reports submitted to its Board of Trustees as required in V.H.1. above no later than seven (7) days after the Board's action(s). Reports submitted to the USHE shall be accompanied by a certification from the University president which shall state that the University president has reviewed the reports. The report shall also include a certification by the public treasurer that the reports accurately reflect the investment activity, the cost and market value of all investments at month's end and that all investments conform with University and Board of Regents policies and with the State Money Management Act and the rules of the State Money Management Council except as specifically noted in the certificate.

3. Annually, no later than the date required by the USHE, the University shall submit, on forms provided by the USHE, a summary report of its money management activities for the prior fiscal year. This report shall include the University's internal auditor's opinion regarding (1) the fairness of presentation of the report in accordance with generally accepted accounting principles and (2) compliance with the applicable state statutes, in particular, the State Money Management Act, rules of the State Money Management Council and policies of the Board of Trustees and of the State Board of Regents. A copy of the report will be presented by the vice president for Administrative Services to the Board of Trustees for its information at its next regularly scheduled meeting.

4. Reports of the performance of any independent investment managers will be submitted by the vice president for Administrative Services each calendar quarter to the Board of Trustees for its information.

VI. INVESTMENT ADVISORY COMMITTEE

The University Investment Committee, chaired by the vice president for Administrative Services and consisting of the chair of the Business Committee of the Board of Trustees, the University president, the vice president for Administrative Services, the vice president for University Advancement/Community Partnerships, the director of Accounting Services, the public treasurer, one community member appointed by the University president, and one representative from the University Foundation Board of Directors shall meet at least once each calendar quarter to do the following:

A. Recommend to the Board of Trustees adoption of appropriate policies or practices relating to the investment of public funds and allocation of earnings.

B. Review current economic conditions and future economic forecast

C. Review the University's current investment strategy, investment portfolio and institutions in which University funds are invested

D. Formulate the investment strategy to be employed for the next quarter

E. Recommend to the Board of Trustees the engagement, termination or continuation of external investment counsel or investment managers

F. Review the annual Money Management Report and auditor's opinion

G. Annually establish: (a) the minimum balance required for accounts to be eligible to participate in the distribution of investment earnings, and (b) the amount of endowment earnings transferred to endowment principal to maintain purchasing power of the endowment.

VII. RELATIONSHIPS WITH FINANCIAL INSTITUTIONS

Qualified depositories as defined by the State Money Management Act shall be selected through the banking services procurement process, which shall include a formal request for proposals issued every four years in accordance with the University Banking Services Policy (PPM 5-4c).

VIII. ETHICS AND CONFLICTS OF INTEREST

The public treasurer and other officers involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which would impair their ability to make impartial investment decisions. University investment officials shall disclose in advance to the University president any material financial interests in financial institutions, investment counselors or investment managers with which the University has or is considering to have an investment. Such officers shall subordinate their personal investment transactions to those of the University, particularly with regard to the timing of purchases and sales.